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What’s Ahead For The Affordable Care Act In 2013?

This month marks the third anniversary of the Patient Protection and Affordable Care Act becoming law.

Consumers have gained access to many new benefits under the law since it was passed in 2010. They include free preventive services, new rights to appeal insurers’ decisions, drug discounts for seniors on Medicare, and tax credits for small businesses.

Yet the biggest changes are set to take place less than a year from now. On Jan. 1, 2014, all Americans will be guaranteed access to health insurance coverage.

Here are some of the biggest developments to watch in 2013.

Health Insurance Marketplaces

One of the biggest changes will come in the form of new health insurance marketplaces, also called exchanges. Starting in October, individuals without access to health insurance through a job will shop for, compare, and enroll in health plans through these new online insurance super malls. Small businesses can use them, too. People will also find out if they qualify for tax breaks to help them pay for their insurance coverage.

While both federal and state governments are working furiously to get the markets up and running in time for October’s open enrollment, the public remains largely in the dark about what’s to come. According to a new poll by the Kaiser Family Foundation, nearly 6 in 10 U.S. residents say they don’t have enough information to understand how they’ll be affected by the law.

That’s why starting in late summer and early fall, you can expect to be bombarded with messages about the health insurance marketplaces from a wide range of sources, including the media, federal and state governments, state departments of insurance, the state-based health insurance marketplaces, tax preparers, health care providers, private groups, and social service agencies.

There will be three primary messages you’re likely to hear, says Lynn Quincy, senior health policy analyst for Consumers Union, the policy arm of Consumer Reports:

The marketplaces are opening their doors for open enrollment in October for insurance benefits that will take effect Jan. 1, 2014.

This is a different ball game. “The rules are changing. Now you cannot be turned down [by insurers],” Quincy says. Previously, insurance companies could deny coverage to people with pre-existing conditions.

“There will be help to lower your insurance costs if you qualify for coverage,” Quincy says. Families of four making as much as $94,000 annually will receive tax credits from the federal government to help lower their insurance costs.

Employer Communication

If you’re one of the nearly 140 million Americans who gets your health benefits through your job, the law’s biggest changes won’t have much impact on you. Most employers who offered insurance before the law was passed will continue doing so. And keeping the insurance through your employer rather than buying it on your own is still likely to be your best option.

“The majority of people can ignore this as background noise. For those with employer-sponsored insurance it won’t matter,” says Sabrina Corlette, research professor and project director at the Health Policy Institute at Georgetown University.

Still, expect to hear from your company about all the upcoming changes.

Employers are required by federal law to send workers a notice telling them about the new insurance marketplaces before Oct. 1, 2013. Even earlier than that, companies will be eager to help employees understand the differences between the health insurance coverage they provide and what will be available through the marketplaces.

“There’s likely to be confusion, particularly for those with coverage through their employer today,” says Mike Thompson, health care consultant with PricewaterhouseCoopers.

One of the biggest concerns is that during this fall’s advertising blitz many people will wrongly assume they can lower their costs by dropping their employer’s benefits to buy a health plan on the marketplace, where tax credits will be available. You won’t be eligible for tax credits unless your company’s health insurance plan costs more than 9.5% of your annual income.

“That’s clearly one place where people could make a potentially bad decision,” says Sandy Ageloff, senior consultant with Towers Watson. “It’s critical for individuals, particularly for those with employer coverage, to really pay attention to the messaging coming from employers, and to take the time to understand the law.”

Expanding Medicaid: Help Paying for Insurance

Will your state be expanding its Medicaid program to cover more people? This is a development to watch between now and the summer.

Last summer, the Supreme Court ruled that states can choose not to expand their Medicaid programs to cover more low-income people.

As a result, 19 states have declined or not yet decided whether to accept federal funds that would allow them to cover people earning up to 138% of the poverty level, or about $15,400 a year for an individual. That could place a large number of people in need of Medicaid coverage out in the cold. In Texas, for example, it’s estimated that 1.5 million uninsured people would lose on out coverage if Gov. Rick Perry doesn’t decide to expand Medicaid for Texans.

Because the federal government pays for 100% of states’ expansion for the first three years starting in 2014 and gradually lowering that to 90%, it’s widely believed that the deal is too good for governors to pass up. Many are facing intense pressure from hospitals and other businesses within their states that have much to gain from the expansion.

“All that I’ve heard publicly from Health and Human Services is that we assume eventually all states will expand,” Corlette says.